Smart SpendingSmart Spending

Why you should apply to pricey schools

If you can't afford high tuition, you're the very person who should be applying to expensive, top-tier colleges.

By Karen Datko Apr 15, 2010 5:47PM

This guest post comes from Ramit Sethi at I Will Teach You To Be Rich.


When it comes to student loans, financial aid, and higher education, everyone’s got an opinion. They just usually happen to be wrong.


When I was in high school, it drove me crazy to hear people saying things like, “Oh, I’m not going to apply to Harvard. Even if I could get in, there’s no way I could afford the tuition.”


This is wrong. In fact, if Harvard accepted them, these very people would likely have to pay nothing. But people don’t understand that. Like naive car buyers, they truly believe that “tuition” is what people actually pay, and are predictably too intimidated to even apply.


My friends who didn’t apply to these colleges are perfect examples of people who do the job of rejecting themselves before anyone else can reject them. It’s sad, because many of the people who think this way simply don’t know any better.


In reality, almost nobody pays the full sticker price.


Hundreds of thousands of dollars

Here’s my 10-second background so you know where I’m coming from: I grew up in a middle-class family with immigrant parents and three other siblings, got into Stanford (where I completed my undergraduate and graduate studies), and secured hundreds of thousands of dollars in scholarships.


But even if I hadn’t won a single scholarship, my financial aid would have required me to only pay single-digit thousands per year for a Stanford education.


That’s why it’s aggravating to read people, especially anonymous online commenters, who persist in advising students to apply to community colleges and state universities for financial reasons. That’s nonsense. If you want to go to your local university to stay close to your family, or you prefer a smaller school, fine. But don’t blame it on money. It’s just not true.


Three notes about applying to expensive schools:

  • If you’re good enough to get in, top-tier universities will take care of you. Yes, “if you’re good enough” includes incredibly complex socio-economic connotations, but we can’t address them all here. I simply want to highlight the mistaken belief that money is holding students back from attending top-tier colleges because of tuition costs. No. It’s not. If you’re good enough to get in, top-tier universities will take care of you, financially.
  • Your college is not a technical school. It’s not only about how much money you’ll make once you graduate, like so many people try to claim. There are ineffable qualities to being surrounded by an extremely high caliber of peers. I’m not even saying, “Go to a top-tier university” (although I think you should). Just apply to them.
  • Tuition should be one of the last decisions you make. Stop thinking about the money up front. First, focus on getting into the best schools possible, whatever that means for you. Once you secure admission, worry about the finances. Remember, if you’re good enough, the universities want you there, and they have hefty treasure chests to ensure that you matriculate.

Harvard dean: “Never allow a lack of financial resources to stand in the way of reaching for their first choice college ….”

The curious aversion to student debt is at once irrational and understandable. To put it bluntly, I wouldn’t take on $40,000 of debt to attend Chico State. Actually, I wouldn’t pay $10 to go to Chico, and I would rather send my daughter to a Chinese prison than the four-year party that is ASU or UofA. But I would easily pay $40k to attend a top-tier school like Stanford, Harvard, or Yale because of the education, caliber of peers, and opportunities available at schools like this.

Yet the constant drumbeat of “avoid student debt” produces some funny thinking.


Washington Post columnist Jay Mathews asked the provocative question, "Do you know a high-achieving student kept from college because of money?" Not one person could provide an example.

As William R. Fitzsimmons, the Harvard dean of admissions and financial aid, writes, “Promising students should never allow a lack of financial resources to stand in the way of reaching for their first choice college.”


Always, always apply to the best schools you could possibly get into.


Does more expensive mean better?

It’s important to address whether “expensive university = better.”


My take: Not always, and “better” is different for everyone. But can we stop being politically correct for a minute? Yes, expensive universities are often better than less expensive schools. At Stanford, I met people I could have never otherwise met. I had access to resources that few other colleges could equal, and experiences that few other colleges could provide. I learned an entirely different way of thinking.


The point is this: People assume that more expensive colleges are out of their reach, when in reality, if you can’t afford much money, you’re the very person who should be applying to expensive colleges.


Related reading at I Will Teach You To Be Rich:

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.